Question

"Price fixing by business is not generally viewed as an acceptable or desirable practice (in domestic markets). When governments enter the field of price administration, they presume to do it for the general welfare in an effort to lessen the effects of 'destructive competition' in a particular market." Is this type of government activity desirable? Is government price administration beneficial? Explain.

Answer 1

Price fixing is the process of creating a level where the competitors in the industry agree not to sell below a certain price level or that will have a negative impact on the industry and I believe that this is an unethical practice to plan and decide internally. Although there are certain benefits if this practice as well because this will not create destructive competition and therefore organiAtions and businesses need to understand the importance of surviving and the government also is involved in the process in order to ensure a healthy competition in the industry as well and in order to pro.ite the same, the government may take up.prive administration but this needs to be discussed with the business entities or it may have a negative impact.